Many businesses don’t maintain debt-collection departments of their own. Some smaller businesses don’t even bother with vigilant debt collection, reasoning that the effort and resources spent collecting debts could be better used to attract new accounts and customers [source: The Business Start Page]. But if you've fallen behind on payments for a major purchase -- such as a car, a kitchen appliance or that new 52-inch plasma-screen television -- it's a safe bet that most businesses will turn your account over to a collection agency in order to retrieve the money you owe them.

Dealing with a collector is seldom a pleasant experience, even if the collector is ethical and follows the guidelines of the Fair Debt Collection Practices Act. The most reputable collection agencies train their workers to be tough negotiators. What may seem like legitimate reasons to you are often mere excuses to them. Whether you lost your job, needed money to cover emergency medical expenses for your child, had to pay for major repairs on your only car, or fixed the part of your roof that collapsed under last winter's heavy snowfall, the collector has probably heard it all before. Often their dispassionate demeanor results from having heard too many fabricated tales of woe from debtors who have simply accrued more debt than they can handle.

You may be surprised to learn that sometimes collectors offer suggestions that can be of enormous help. They may accept partial payments or work out a payment plan that allows you to live within your means.

Other times, however, collectors’ remedies may be impractical, such as borrowing money from friends or relatives or refinancing your home. The better you know your own financial situation, the more effectively you can respond to such suggestions. Collectors may suggest remedies in strong wording that stops just short of being threatening. As a last resort, they will take advantage of their legal right to sue you for what you owe.

Despite being on the receiving end of such tactics, most debtors understand that collectors have a valid reason to pursue past-due payments. According to U.S. Trustee J. Christopher Marshall, "In the vast majority of cases, the debtors are honest and desperately in need and deserving of a fresh start" [source: Marshall]. Most people make major purchases with every intention of making timely payments. Nobody has foreknowledge of unexpected financial crises. Dealing with a debt collector can be stressful, but debtors know they have little room for complaint if the collector is honest and ethical.

Dealing with an unethical collector, however, presents an added list of troublesome challenges. Certain debt collectors will take advantage of the average debtor's ignorance of fair debt-collection practices. They also know that many people would rather settle a debt, even one assessed unfairly, than resort to complicated and costly legal action against the collection agency.

The easiest way to determine if a collector is operating within ethical standards is to familiarize yourself with the Fair Debt Collection Practices Act. To do that, just take a look at the next page.